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Mylene's avatar
Mylene
Experienced Cover User
2 years ago
Solved

Additional Tax + NO TAX FREE THRESHOLD + HELP

I need help working out how to tax an employee who

 

  • Pays an additional 26%
  • Has a Help debt
  • Has No Tax Free threshold (as this is his second job)

If I change him from No Tax Free Threshold + Help to Withholding variation of 26%, he is undertaxed.

 

Using advice from this forum, I created a Payroll category for the 26% additional tax.

At the end of each ATO reporting period, I add the amount of additional tax deducted and the PAYG amount together and remit both to the ATO.

 

This works on my end (although I have to be vigiliant to round cents to the nearest dollar in each pay and then remember to remit both amounts to the ATO!)

 

However, from the employee's perspective, this is less than ideal. He has to add 26 individual fortnightly deduction amounts to his PAYG when he prepares his return in the ATO portal.

 

Can you foresee a problem with me keeping the additional 26% payroll category (so MYOB calculates the correct tax) and then removing the amount from that field and adding it to the amount in the PAY Withholding field?

 

Or is there a solution to this where I don't have to manually do this (and potentially make an error)?

 

 

  • Hi

     

    Well that is a problem, perhaps he could nominate an amount per fortnight ,which would make it easier for you.

     

    However , if you have to made the calculations prior to payroll processing then you could add the additional tax to be paid by overwriting the PAYG Withholding in the pay itself 

     

    That's the only suggestion I can come up with but it would save having to use the other payroll category which I think is problematic

     

    Hope that helps

     

    Lisa

7 Replies

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  • LRBooks61's avatar
    LRBooks61
    Ultimate Cover User

    Hi

    Does the employee pay 26% on his gross wage? Or is it calculated in a different manner?

     

    I would suggest that if they pay a calculatable amount you could add it to the employee card

     

    Payment details - tax tab - extra tax

     

    That way it is added at the time of payroll and is reported as PAYG withholding along with everything else.

     

    Hope this helps

     

    Lisa

    • Mylene's avatar
      Mylene
      Experienced Cover User

      He pays 26% on his gross wage.

       

      Unfortunately, he is casual so the hours vary each fortnight and the amount varies pay to pay.

      • LRBooks61's avatar
        LRBooks61
        Ultimate Cover User

        Hi

         

        Well that is a problem, perhaps he could nominate an amount per fortnight ,which would make it easier for you.

         

        However , if you have to made the calculations prior to payroll processing then you could add the additional tax to be paid by overwriting the PAYG Withholding in the pay itself 

         

        That's the only suggestion I can come up with but it would save having to use the other payroll category which I think is problematic

         

        Hope that helps

         

        Lisa